China Permits Fully Foreign-owned Hospitals

Published By : 10 Jul 2015 |Published By : QYRESEARCH

In China, rapid urbanization, large geriatric population base and exploding pollution levels have triggered need for improved healthcare, mainly in large cities in the country. In the next three years, the healthcare expenditure in China is projected to rise 11.8% ever year.

To meet the swelling demand for quality healthcare services, the National Health and Family Planning Commission (NHFPC) of China allowed Wholly Foreign Owned Hospitals (WFOH) to be opened in seven provinces and cities in China on July 25, 2014.

Under the new regulations, Tianjin, Jiangsu, Guangdong, Beijing, Shanghai, Fujian, and Hainan will have foreign owned hospitals, although establishments of such facilities in any other location in China will be strictly forbidden.

Regardless of this, the expansion prospects and freedom of WFOH in these seven cities and provinces opens great opportunities for FDIs, as far as investors are aware of the requirements, challenges, and limitations that are associated with opening a foreign-owned hospital in the country.

Other than location requirement from NHFPC, there are other requirements for WFOH to be opened in China: WFOH should be capable of bearing civil liabilities independently, WFOH need to have experience in health investment, medical fields, and management, WFOH need to meet standards for national medical institute, WFOH should meet either one of the requirements which includes ; to offer ideas for advanced hospital management and service models, offer advanced technology and equipment for medical science, improve local medical services, funds, technology, and facilities, and WFOH is not allowed to engage in practicing Traditional Chinese Medicine (permissible if the investor is from Hong Kong, Macau, and Taiwan).

Foreign investors that are considering capitalizing on new WFOH opportunities in China should keep in mind that the application process to establish as a WFOH can be quite lengthy and tedious. WFOH first need to file an application to the relevant for Municipal Health and Family Planning for pre-approval.